A Simulation Model of New Product Diffusion Based on Small World Network

Chunxu WU, Yuying ZHANG

Abstract

This paper studies the impact of consumer network structure on the diffusion of new products. Taking a communication product for example, we study its diffusion through simulation based on small world network. We find that the greater the proportion of initial adopters is, the faster the new products diffuses, and it’s marginal benefit is decreasing. The social network’s connection can be divided into weak links and strong links with different functions. The more the weak links are, the faster the new products diffuse. For the rise in marketing costs, enterprises need to improve the possibility of the success of new product diffusion with comprehensive consideration.